For most listeners, good music is simply a source of enjoyment and pleasure, but for some people it is very big business.
Owning the publishing rights to popular songs can be a very lucrative investment and on August 10th in 1985 one of the biggest deals in the music business was finalised when American pop idol Michael Jackson acquired the publishing rights to almost all of The Beatles songs.
It caused a rift between Jackson and former Beatle Paul McCartney, who co-wrote most of the songs with fellow band member John Lennon (who was shot dead in 1980 in New York). Jackson and McCartney had previously been good friends, working together on several projects, but if McCartney was peeved by Jackson’s purchase, he only had himself to blame.
Ironically, it was McCartney who first sparked Jackson’s interest in acquiring publishing rights to other people’s songs as a business investment. The two stars had been collaborating on McCartney’s 1983 “Pipes of Peace” album, with Jackson staying at Paul and Linda McCartney’s home during the recording sessions and becoming friendly with both. One evening, McCartney showed Jackson a thick bound notebook listing all the songs for which he owned the publishing rights.
He explained to a curious Jackson that owning the publishing rights to a song was a way to make big money, especially if the song was used in something like a film soundtrack or advertising campaign. Jackson joked that one day he would buy The Beatles’ songs to make some really big money, which McCartney laughed at.
But even if Jackson was just joking at the time, his interest in acquiring publishing rights began to grow. Over the next few years he bought the rights to several successful songs, including “The Wanderer” and “Runaround Sue” by Dion DiMucci, steadily building a considerable portfolio. But his big chance came in late 1984 when wealthy Australian businessman Robert Holmes à Court announced he was selling the ATV Music catalogue, which included most of The Beatles’ songs.
When The Beatles were becoming successful in the early 1960s, a publishing company called Northern Songs was set up to handle their songs. It was co-owned by songwriters Lennon and McCartney, Beatles manager Brian Epstein and music publisher Dick James, who held a controlling interest. In 1969 James offered to sell his shares in Northern Songs to Associated Television (ATV), which started out as a TV company but soon expanded into the music business and music publishing.
Lennon and McCartney opposed the sale and tried to gain a controlling interest in Northern Songs to retain full publishing rights to their songs. But, up against the financial clout and business acumen of ATV founder Lew Grade, they failed and the sale went ahead. In 1973, they entered co-publishing agreements with ATV Music – the division of ATV set up to manage all its publishing interests.
While ATV Music was successful, its parent company began to experience financial difficulties and in 1981 Lew Grade sought bids to buy Northern Songs. McCartney submitted a joint bid with the recently-widowed Yoko Ono (John Lennon’s wife), but it was declined and Grade decided instead to sell the whole of ATV music. Before he could do so, his ailing company was taken over by Australian investor Robert Holmes à Court, who replaced Grade as chairman.
After a couple of years in charge he too decided to sell ATV Music and began seeking bids. According to his negotiator, McCartney was offered first refusal, but declined to buy because he felt it was overpriced. Instead, and after lengthy negotiations, it was Michael Jackson who bought ATV Music – and with it the publishing rights to The Beatles songs – for a reported $47.5m.
If McCartney was angry he played it down, saying publicly that someone had to get it and it might as well be Jackson. But he also hinted in interviews that he had spoken with his friend about a new deal which would mean some of the income from publishing rights to Beatles songs going to himself and Lennon’s estate. When these conversations came to nothing, he and Jackson “kind of drifted apart”, as McCartney put it. They never worked together again.
In 1995 Jackson merged his publishing rights catalogue with Sony Music Publishing to form a new company, Sony/ATV Music Publishing. As well as owning half the new company, Jackson was also paid a reported $110m. in the deal, largely due to the value of The Beatles back catalogue. The rights to Jackson’s own songs were not included in the deal.
When Jackson died in 2009 there was a rumour that his half-share of publishing rights to Beatles songs was left to McCartney in his will, but it wasn’t true. Instead, in 2016, Sony acquired the Jackson estate’s stake in Sony/ATV music for a reported $750m. A third of the money was used to pay off the estate’s debt, with the rest put in trust for Michael Jackson’s children.